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Preferred Bank Reports Preliminary Fourth Quarter Results

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LOS ANGELES, Jan. 22, 2013 (GLOBE NEWSWIRE) -- Preferred Bank (Nasdaq:PFBC), an independent commercial bank focusing on the Chinese-American and diversified Southern California mainstream market, today reported preliminary results for the quarter and year ended December 31, 2012. Preferred Bank ("the Bank") reported net income of $3.4 million or $0.25 per diluted share for the fourth quarter of 2012. This compares to net income of $3.8 million or $0.29 per diluted share for the fourth quarter of 2011 and compares to net income of $2.8 million or $0.21 per diluted share for the third quarter of 2012. Net income for the fourth quarter of 2011 was aided by the $1.4 million partial reversal of the Bank's valuation allowance on its deferred tax asset ("DTA"). Pre-tax income on a year over year basis increased from $2.4 million in the fourth quarter of 2011 to $4.5 million in the fourth quarter of 2012, an increase of 90%. Results for the fourth quarter and year ended December 31, 2012 are preliminary due to the ongoing effort to finalize the Bank's income tax position. At this point, the Bank anticipates that the actual income tax expense for the fourth quarter may be less than that currently recorded.

-- Highlights from the fourth quarter of 2012 include:

  • Linked quarter loan growth of $56.9 million or 5.3%
  • Linked quarter deposit growth of $65.6 million or 5.1%
  • OREO declined by $6.7 million or 19% from September 30, 2012
  • Nonperforming loans declined by $3.9 million or 16.9% from September 30, 2012
  • Net interest margin saw slight expansion from 3.88% to 3.91% linked quarter

Li Yu, Chairman and CEO commented, "For the fourth quarter, the Bank earned $3.4 million or $0.25 per diluted share. This amount exceeded our own expectations and we are pleased to report it. Non-performing assets continue to decline. During the quarter, we reduced OREO by $6.7 million, nonperforming loans by $3.9 million and reduced TDR's by $8.1 million. Our resolution efforts continue and we hope to achieve meaningful results in the ensuing quarters.

"Total loans grew by $56.9 million or 5.3% on a linked quarter basis while total deposits grew by $65.6 million or 5.1%. We are excited with the growth and the composition of the expansion. Our net interest margin, under a very competitive pricing environment, held up well and even expanded slightly. We also improved our efficiency during the quarter as our assets per employee now stands at $11.7 million, well beyond peers.

"2012 was a year of many accomplishments; nonperforming assets were significantly reduced, loan and deposit growth was very strong, especially DDA deposits, capital remained at robust levels, liquidity is as high as it has ever been and our efficiency improved.

"As we are entering a new year, I would like to offer the following observations: Our OREO portfolio which is carried at or below recent appraised values will continue to decline in 2013. With the strengthening housing market as a backdrop, total OREO costs for 2013 which includes loss on sales, valuation adjustments and carrying costs is likely to be much less that the $8.6 million recorded in 2012. Likewise we are also expecting the loan loss provision in 2013 to be much less than the $19.8 million recorded in 2012. Currently, of the $19.0 million of nonaccrual loans, $15.1 million is largely real estate secured. These loans are properly marked based on recent appraisals and therefore any further value erosion of these assets is likely to be mild. More importantly, adversely classified loans (excluding NPL's) now stands at $25.7 million. Again, this potential 'poison well' of loans is mostly real estate secured and already marked at current values. Therefore we do not anticipate significant value reduction, although the resolution of NPL's and classified loans may take longer due to the laborious legal and foreclosure process. We believe that a more significant portion of the provision for loan loss for 2013 will be due to loan growth.

"Going into the new year, our loan pipeline remains very healthy. With our new San Francisco branch opening in early February and the planned additions to our loan staff, we believe our loan portfolio will continue to grow. The rate of growth however, will be somewhat dependent on the economy.

"The termination of the Transaction Account Guarantee ("TAG") program did not have an impact on us during the fourth quarter. In fact, our deposits and more importantly demand deposits continued to grow during the quarter. We are pleased with our relationship banking efforts and our customer loyalty. In 2013, liquidity will be ample to support our planned loan growth.

"In the coming year, maintaining our net interest margin will likely be one of our biggest challenges. Market competition for new loans has been fierce and defending existing loans against raiding by other institutions is almost a daily event. With a vibrant loan pipeline, we have thus far been able to be selective and hold our pricing requirements. We are fortunate to have ample idle cash available for deployment which will help the stability of our margin.

"One negative factor impacting our results for 2013 will be income taxes. Due to the reversal of the valuation allowance on our deferred tax asset in 2012, our effective tax rate ("ETR") in 2012 was artificially low. In 2013, the ETR will be at around 40% however we are confident that the Bank's net income will improve even with this higher rate.

"Finally, we believe that we are in full compliance with all the provisions of the Memorandum of Understanding ("MOU") that we entered into with the FDIC and the DFI. Barring any unforeseen developments, we hope that the MOU will be lifted after the next full safety and soundness exam which will then allow us the flexibility to use our capital more effectively."

Operating Results

Net Interest Income and Net Interest Margin. Net interest income before provision for loan and lease losses increased to $14.2 million from the $11.3 million recorded in the fourth quarter of 2011 and an increase from $13.3 million for the third quarter of 2012. The strong increase over 2011 is due to the loan growth achieved during 2012. The Bank's taxable equivalent net interest margin was 3.91% for the fourth quarter of 2012, a 22 basis point increase over the 3.69% achieved in the fourth quarter of 2011 and a 3 basis point increase from the 3.88% recorded in the third quarter of 2012.

Noninterest Income. For the fourth quarter of 2012, noninterest income was $749,000 compared with $822,000 for the same quarter last year and compared to $667,000 for the third quarter of 2012. Service charges on deposits and trade finance income both increased in the fourth quarter of 2012 compared to the same period last year and compared to the third quarter of 2012. Offsetting this increase was a decrease in other income from $241,0000 in the fourth quarter of 2011 down to $78,000 in the current quarter.

Noninterest Expense.Total noninterest expense was $8.2 million for the fourth quarter of 2012, compared to $7.4 million for the same period last year and $9.1 million for the third quarter of 2012. Salaries and benefits expense increased by $397,000 over the fourth quarter of 2011 and by only $88,000 over the third quarter of 2012. The increase over last year and was due to higher bonus expense as well as a higher staffing level. Occupancy expense was $753,000 compared to the $739,000 recorded in the same period in 2011 and $743,000 recorded in the third quarter of 2012. Professional services expense was $1.0 million for the fourth quarter of 2012 compared to $661,000 for the fourth quarter of 2011 and the $1.0 million posted in the third quarter of 2012. The increase over 2011 was due primarily to an increase in legal fees and other consulting fees. OREO-related expenses totaled $1.7 million for the fourth quarter of 2012 (consisting of $1.2 million in valuation charges/loss on sale) and this represented an increase from the $1.2 million recorded in the same quarter last year but was a decrease from the $2.5 million posted in the third quarter of 2012. Other expenses were $1.0 million in the fourth quarter of 2012, a decrease of $407,000 from the same period in 2011 and a decrease of $278,000 over the third quarter of 2012. The variance compared to the same period last year was primarily due to a decrease in FDIC premiums of $294,000.

Balance Sheet Summary

Total gross loans and leases (including loans held for sale) at December 31, 2012 were $1.13 billion, up from $953.6 million as of December 31, 2011 and up from the $1.07 billion as of September 30, 2012. Comparing balances as of December 31, 2012 to December 31, 2011: Residential real estate loans increased from $120.0 million to $152.4 million; total land loans decreased from $39.2 million to $27.2 million; commercial real estate loans increased from $416.0 million to $493.1 million; for-sale housing construction loans decreased from $43.5 million to $36.3 million; other construction loans increased from $32.4 million to $38.1 million and total commercial loans increased from $302.5 million to $372.5 million.

Total deposits as of December 31, 2012 were $1.36 billion, an increase of $239.6 million from the $1.12 billion at December 31, 2011. As of December 31, 2012 compared to December 31, 2011; noninterest-bearing demand deposits increased by $206.7 million or 86.2%, interest-bearing demand and savings deposits increased by $91.1 million or 35.6% and time deposits decreased by $58.3 million or 9.4%. Total borrowings decreased by $26.0 million as the Bank paid off its senior debt that matured in February. Total assets were $1.55 billion, a $243.5 million or 18.6% increase from the total of $1.31 billion as of December 31, 2011.

Asset Quality

As of December 31, 2012 total nonaccrual loans decreased to $19.0 million (excluding loans held for sale) compared to $43.5 million as of December 31, 2011 and compared to $22.9 million as of September 30, 2012. Total net charge-offs for the fourth quarter of 2012 were $3.3 million compared to net charge-offs of $1.4 million for the third quarter of 2012. Based on a detailed analysis of all impaired and classified loans, as well as an analysis of other qualitative factors, the Bank recorded a provision for loan losses of $2.3 million for the fourth quarter of 2012, down slightly from the $2.4 million recorded in the same period last year and compared to $1.2 million recorded in the third quarter of 2012. The allowance for loan loss at December 31, 2012 was $20.6 million or 1.84% of total loans compared to $23.7 million or 2.50% of total loans at December 31, 2011.

NPA Migration

Non-Performing Assets Migration – Q4 2012


Non Accrual Loans

OREO
Balance, September 30, 2012 $ 22,862 $ 34,959
Additions 1,395 2,402
Transfer to OREO (126) --
Loans Cured -- --
Sales/Payoffs/Trf to HFS (4,611) (7,925)
Charge-off (525) (1,156)
Balance, December 31, 2012 $ 18,995 $ 28,280

The table above excludes loans held for sale and excludes TDR's that are on accrual status. Performing TDR's totaled $726,000 as of December 31, 2012. The $12.2 million in loans held for sale include one nonaccrual loans for $7.2 million. All loans held for sale are paying as agreed.

Real Estate Owned

Total OREO decreased to $28.3 million compared to $35.0 million as of September 30, 2012. During the fourth quarter of 2012, the Bank sold four OREO properties with a book value of $7.9 million.

Asset Quality Table – December 31, 2012

($ in thousands) 30-89 Days Nonaccrual OREO
# $ # $ # $
Land-Residential -- $ -- -- $ -- 11 $ 15,128
Land Commercial -- -- -- -- 3 7,828
Construction:
Residential 1 5,400 1 5,544 1 3,051
Commercial -- -- -- -- -- --
RE-Housing for sale -- -- 1 727 -- --
CRE-Commercial 2 5,382 2 1,265 1 2,273
C&I/Trade Finance 2 376 10 11,459 -- --
Totals 5 $ 11,158 14 $ 18,995 16 $ 28,280

Asset Quality Table – September 30, 2012

($ in thousands) 30-89 Days Nonaccrual OREO
# $ # $ # $
Land-Residential -- $ -- 1 $ 300 12 $ 20,843
Land Commercial -- -- -- -- 3 7,828
Construction:
Residential -- -- 1 6,102 1 3,051
Commercial -- -- -- -- -- --
RE-Housing for sale -- -- -- -- 1 2,622
CRE-Commercial 2 1,446 2 836 1 615
C&I/Trade Finance -- -- 12 15,624 -- --
Totals -- $ 1,446 16 $ 22,862 18 $ 34,959

Capitalization

As of December 31, 2012, the Bank's tier 1 leverage ratio was 11.86% and total risk-based capital ratio was 14.88%. This compares to 12.51% and 15.77% as of December 31, 2011, respectively. Pursuant to the Memorandum of Understanding (MOU) entered into on May 25, 2012, the Bank is required to maintain the following capital ratio:

Ratio Preferred Bank at 12/31/12 MOU Requirement
Tier 1 Leverage Ratio 11.86% 10.0%

Conference Call and Webcast

A conference call with simultaneous webcast to discuss Preferred Bank's fourth quarter 2012 financial results will be held tomorrow, January 23, at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 877-941-0844 (domestic) or 480-629-9835 (international). The passcode for the call is 4590101. There will also be a live webcast of the call available at the Investor Relations section of Preferred Bank's website at www.preferredbank.com. Web participants are encouraged to go to the website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software.

Preferred Bank's Chairman and CEO Li Yu, President and COO Wellington Chen, Chief Financial Officer Edward J. Czajka and Chief Credit Officer Louie Couto will be present to discuss Preferred Bank's financial results, business highlights and outlook. After the live webcast, a replay will remain available in the Investor Relations section of Preferred Bank's website. A replay of the call will also be available at 800-406-7325 (domestic) or 303-590-3030 (international) through January 30, 2013; the passcode is 4590101.

About Preferred Bank

Preferred Bank is one of the largest independent commercial banks in California focusing on the Chinese-American market. The bank is chartered by the State of California, and its deposits are insured by the Federal Deposit Insurance Corporation, or FDIC, to the maximum extent permitted by law. The Company conducts its banking business from its main office in Los Angeles, California, and through nine full-service branch banking offices in Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Anaheim and Pico Rivera, California. Preferred Bank offers a broad range of deposit and loan products and services to both commercial and consumer customers. The bank provides personalized deposit services as well as real estate finance, commercial loans and trade finance to small and mid-sized businesses, entrepreneurs, real estate developers, professionals and high net worth individuals. Preferred Bank continues to benefit from the significant migration to Southern California of ethnic Chinese from China and other areas of East Asia. While its business is not solely dependent on the Chinese-American market, it represents an important element of the bank's operating strategy, especially for its branch network and deposit products and services. Preferred Bank believes it is well positioned to compete effectively with the smaller Chinese-American community banks, the larger commercial banks and other major banks operating in Southern California by offering a high degree of personal service and responsiveness, experienced multi-lingual staff and substantial lending limits.

The Preferred Bank logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=11817

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the Bank's future financial and operating results, the Bank's plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the Bank's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: changes in economic conditions; changes in the California real estate market; the loss of senior management and other employees; natural disasters or recurring energy

shortage; changes in interest rates; competition from other financial services companies; ineffective underwriting practices; inadequate allowance for loan and lease losses to cover actual losses; risks inherent in construction lending; adverse economic conditions in Asia; downturn in international trade; inability to attract deposits; inability to raise additional capital when needed or on favorable terms; inability to manage growth; inadequate communications, information, operating and financial control systems, technology from fourth party service providers; the U.S. government's monetary policies; government regulation; environmental liability with respect to properties to which the bank takes title; and the threat of terrorism. Additional factors that could cause the Bank's results to differ materially from those described in the forward-looking statements can be found in the Bank's 2011 Annual Report on Form 10-K filed with the Federal Deposit Insurance Corporation which can be found on Preferred Bank's website. The forward-looking statements in this press release speak only as of the date of the press release, and the Bank assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contained in the forward-looking statements. For additional information about Preferred Bank, please visit the Bank's website at www.preferredbank.com.

Financial Tables to Follow

PREFERRED BANK
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for net income per share and shares)
For the Three Months Ended
December 31,
2012
December 31,
2011
September 30,
2012
Interest income:
Loans, including fees $ 14,504 $ 11,997 $ 13,834
Investment securities 1,496 1,760 1,340
Fed funds sold 10 -- 14
Total interest income 16,010 13,757 15,189
Interest expense:
Interest-bearing demand 489 422 441
Savings 20 20 18
Time certificates 1,297 1,808 1,398
Senior debt -- 188 --
Total interest expense 1,806 2,438 1,857
Net interest income 14,204 11,319 13,332
Provision for loan losses 2,300 2,400 1,200
Net interest income after provision for loan losses 11,904 8,919 12,132
Noninterest income:
Fees & service charges on deposit accounts 480 440 445
Trade finance income 87 57 56
BOLI income 83 84 82
Net gain(loss) on sale of investment securities 21 -- --
Other income 78 241 84
Total noninterest income 749 822 667
Noninterest expense:
Salary and employee benefits 3,316 2,919 3,228
Net occupancy expense 753 739 743
Business development and promotion expense 104 123 73
Professional services 1,003 661 1,004
Office supplies and equipment expense 281 297 283
Total other-than-temporary impairment losses -- -- 8
Portion of loss recognized in other comprehensive income -- -- --
Other real estate owned related expense 1,696 1,227 2,525
Other 1,000 1,407 1,278
Total noninterest expense 8,153 7,373 9,143
Income before provision for income taxes 4,499 2,368 3,655
Income tax expense (benefit) 1,125 (1,399) 833
Net income $ 3,374 $ 3,767 $ 2,822
Income allocated to participating securities (43) -- (37)
Net income available to common shareholders $ 3,331 $ 3,767 $ 2,785
Income per share available to common shareholders
Basic $ 0.25 $ 0.29 $ 0.21
Diluted $ 0.25 $ 0.29 $ 0.21
Weighted-average common shares outstanding
Basic 13,065,227 13,000,092 13,062,146
Diluted 13,291,592 13,000,092 13,255,778
PREFERRED BANK
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except for net income per share and shares)
For the Twelve Months Ended
December 31,
2012
December 31,
2011
Change
%
Interest income:
Loans, including fees $ 55,400 $ 46,464 19.2%
Investment securities 6,116 7,326 -16.5%
Fed funds sold 26 -- 100.0%
Total interest income 61,542 53,790 14.4%
Interest expense:
Interest-bearing demand 1,746 1,295 34.8%
Savings 75 92 -18.3%
Time certificates 5,868 8,163 -28.1%
Senior debt 94 753 -87.5%
Total interest expense 7,783 10,303 -24.5%
Net interest income 53,759 43,487 23.6%
Provision for credit losses 19,800 5,700 247.4%
Net interest income after provision for loan losses 33,959 37,787 -10.1%
Noninterest income:
Fees & service charges on deposit accounts 1,792 1,742 2.9%
Trade finance income 309 241 28.1%
BOLI income 329 333 -1.1%
Net gain on sale of investment securities 575 81 611.7%
Other income 503 393 27.8%
Total noninterest income 3,508 2,790 25.7%
Noninterest expense:
Salary and employee benefits 12,523 11,155 12.3%
Net occupancy expense 2,990 3,060 -2.3%
Business development and promotion expense 294 335 -12.1%
Professional services 3,227 2,267 42.4%
Office supplies and equipment expense 1,154 1,061 8.7%
Total other-than-temporary impairment losses 24 32 -25.0%
Portion of loss recognized in other comprehensive income -- -- 0.0%
Other real estate owned related expense 8,580 8,303 3.3%
Other 5,386 7,180 -25.0%
Total noninterest expense 34,178 33,393 2.4%
Income before provision for income taxes 3,289 7,185 -54.2%
Income tax benefit (19,042) (5,049) 277.1%
Net income $ 22,331 $ 12,234 82.5%
Income allocated to participating securities (302) (195) 100.0%
Net income available to common shareholders $ 22,029 $ 12,039 83.0%
Income per share available to common shareholders
Basic $ 1.69 $ 0.93 82.2%
Diluted $ 1.66 $ 0.93 79.5%
Weighted-average common shares outstanding
Basic 13,050,559 12,995,525 0.4%
Diluted 13,247,389 12,995,525 1.9%
PREFERRED BANK
Condensed Consolidated Statements of Financial Condition
(unaudited)
(in thousands)
December 31 December 31
2012 2011
Assets
Cash and due from banks $ 151,995 $ 142,466
Cash and cash equivalents 151,995 142,466
Securities held to maturity, at amortized cost 979 3,021
Securities available-for-sale, at fair value 210,742 166,083
Loans and leases 1,119,553 949,631
Less allowance for loan and lease losses (20,607) (23,718)
Less net deferred loan fees (2,019) (1,037)
Net loans and leases 1,096,927 924,876
Loans held for sale, at lower of cost or fair value 12,150 3,996
Other real estate owned 28,280 37,577
Customers' liability on acceptances 1,961 427
Bank furniture and fixtures, net 4,383 4,789
Bank-owned life insurance 8,049 7,808
Accrued interest receivable 5,646 4,851
Federal Home Loan Bank stock 4,282 4,164
Deferred tax assets 26,971 6,979
Other asset 950 2,760
Total assets $ 1,553,315 $ 1,309,797
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Demand $ 446,734 $ 239,987
Interest-bearing demand 325,018 233,349
Savings 21,844 22,385
Time certificates of $250,000 or more 208,005 185,001
Other time certificates 355,926 437,231
Total deposits $ 1,357,527 $ 1,117,953
Acceptances outstanding 1,961 427
Senior debt issuance -- 25,996
Accrued interest payable 968 1,292
Other liabilities 6,562 6,081
Total liabilities 1,367,018 1,151,749
Commitments and contingencies
Shareholders' equity:
Preferred stock. Authorized 25,000,000 shares; no issued and outstanding shares at December 31, 2012 and December 31, 2011
Common stock, no par value. Authorized 20,000,000 shares; issued and outstanding 13,234,608 and 13,220,955 shares at December 31, 2012 and December 31, 2011, respectively 162,927 162,884
Treasury stock (19,115) (19,115)
Additional paid-in-capital 24,544 23,456
Accumulated income 15,940 (6,391)
Accumulated other comprehensive income (loss):
Non-credit portion of loss recognized, net of tax of $133 and $367 at December 31, 2012 and December 31, 2011, respectively
(184) (481)
Unrealized loss on securities, available-for-sale, net of tax of $1,131 and $1,554 at December 31, 2012 and December 31, 2011 2,185 (2,305)
Total shareholders' equity 186,297 158,048
Total liabilities and shareholders' equity $ 1,553,315 $ 1,309,797
PREFERRED BANK
Selected Consolidated Financial Information
(unaudited)
(in thousands, except for ratios)
For the Three Months Ended
December 31, September 30, June 30, December 31,
2012 2012 2012 2011
For the period:
Return on average assets 0.88% 0.79% -1.60% 1.17%
Return on average equity 6.87% 6.31% -12.22% 8.97%
Net interest margin (Fully-taxable equivalent) 3.91% 3.88% 3.99% 3.69%
Noninterest expense to average assets 2.14% 2.55% 2.30% 2.28%
Efficiency ratio 54.53% 65.29% 54.60% 60.73%
Net charge-offs (recoveries) to average loans (annualized) 1.20% 0.57% 6.33% 1.18%
Period end:
Tier 1 leverage capital ratio 11.86% 12.19% 12.19% 12.51%
Tier 1 risk-based capital ratio 13.63% 14.08% 14.38% 14.51%
Total risk-based capital ratio 14.88% 15.33% 15.64% 15.77%
Allowances for credit losses to loans and leases at end of period ** 1.84% 2.03% 2.19% 2.50%
Allowance for credit losses to non-performing loans and leases 78.82% 66.60% 64.52% 49.98%
Average balances:
Total loans and leases* $ 1,089,719 $ 1,014,022 $ 990,087 $ 919,944
Earning assets $ 1,456,965 $ 1,379,218 $ 1,343,295 $ 1,234,885
Total assets $ 1,518,106 $ 1,443,942 $ 1,406,508 $ 1,280,354
Total deposits $ 1,312,027 $ 1,255,464 $ 1,213,553 $ 1,081,254
Period end:
Loans and Leases:
Real estate - Single and multi-family residential $ 152,388 $ 147,586 $ 132,256 $ 120,005
Real estate - Land for housing 25,560 22,827 23,180 23,339
Real estate - Land for income properties 1,598 1,608 1,786 15,830
Real estate - Commercial 493,101 476,961 452,750 415,998
Real estate - For sale housing construction 36,347 40,245 41,987 40,977
Real estate - Other construction 38,063 25,547 24,083 30,965
Commercial and industrial 324,753 301,812 275,679 252,161
Trade finance and other 47,743 48,622 46,289 50,356
Gross loans 1,119,553 1,065,208 998,010 949,631
Allowance for loan and lease losses (20,607) (21,601) (21,835) (23,718)
Net deferred loan fees (2,019) (1,695) (1,583) (1,037)
Loans excluding loans held for sale 1,096,927 1,041,912 974,592 924,876
Loans held for sale 12,150 9,573 10,290 3,996
Total loans, net $ 1,109,077 $ 1,051,485 $ 984,882 $ 928,872
Deposits:
Noninterest-bearing demand $ 446,734 $ 406,771 $ 365,292 $ 239,987
Interest-bearing demand and savings 346,862 310,550 290,203 255,734
Total core deposits 793,596 717,321 655,495 495,721
Time deposits 563,931 574,589 580,387 622,232
Total deposits $ 1,357,527 $ 1,291,910 $ 1,235,882 $ 1,117,953
* Loans held for sale are included
** Loans held for sale are excluded
Preferred Bank
Loan and Credit Quality Information
Allowance For Credit Losses & Loss History Year Ended Year Ended
December 31, 2012 December 31, 2011
(Dollars in 000's)
Allowance For Credit Losses
Balance at Beginning of Period $ 23,718 $ 32,898
Charge-Offs
Commercial & Industrial 10,525 5,126
Mini-perm Real Estate 3,903 7,102
Construction - Residential -- 1,665
Construction - Commercial 2,185 664
Land - Residential 592 82
Land - Commercial 6,276 1,453
Others -- 5
Total Charge-Offs 23,481 16,097
Recoveries
Commercial & Industrial 63 940
Mini-perm Real Estate 296 43
Construction - Residential 2 7
Construction - Commercial 145 166
Land - Residential 57 61
Land - Commercial 7 --
Total Recoveries 570 1,217
Net Loan Charge-Offs 22,911 14,880
Provision for Credit Losses 19,800 5,700
Balance at End of Period $ 20,607 $ 23,718
Average Loans and Leases* $ 1,089,719 $ 919,944
Loans and Leases at end of Period* $ 1,119,553 $ 949,631
Net Charge-Offs to Average Loans and Leases 2.25% 1.65%
Allowances for credit losses to loans and leases at end of period ** 1.84% 2.50%
* Loans held for sale are included
** Loans held for sale are excluded

CONTACT: AT THE COMPANY: Edward J. Czajka Executive Vice President Chief Financial Officer (213) 891-1188 AT FINANCIAL PROFILES: Kristen McNally General Information (310) 663-8007 kmcnally@finprofiles.com

Source:Preferred Bank